REGULATORY MATTERS

9 Months Ended

Sep. 30, 2021

Regulatory Capital Requirements Under Banking Regulations [Abstract]

REGULATORY MATTERS

The Bank is subject to certain restrictions on the amount of dividends that may be declared without prior regulatory approval. At September 30, 2021, approximately $18,519 of retained earnings was available for dividend declaration without regulatory approval.

The Bank is also subject to various regulatory capital requirements administered by the federal banking agencies. Failure to meet minimum capital requirements can initiate certain mandatory, and possibly additional discretionary actions by regulators that, if undertaken, could have a direct material effect on the Bank’s financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Bank must meet specific capital guidelines that involve quantitative measures of its assets, liabilities, and certain off-balance sheet items as calculated under regulatory accounting practices. Capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weightings, and other factors.

Quantitative measures established by regulation to ensure capital adequacy require the Bank to maintain minimum amounts and ratios of total capital, Tier 1 capital, and common equity Tier 1 capital to risk-weighted assets, and of Tier 1 capital to average assets. In addition, the Bank is subject to an institution-specific capital buffer, which must exceed 2.50% to avoid limitations on distributions and discretionary bonus payments. Management believes, as of September 30, 2021 and December 31, 2020, that the Bank meets all capital adequacy requirements to which it is subject.

As of September 30, 2021, the Company and the Bank believe they are each well capitalized on a consolidated basis for bank regulatory purposes as their respective capital ratios exceed minimum total Tier 1 and CET1 risk-based capital ratios and Tier 1 leverage capital ratios as set forth in the following

	Actual				Required for Capital Adequacy Purposes				Minimums To Be “Well Capitalized” Under Prompt Corrective Action
	Amount		Ratio		Amount		Ratio		Amount		Ratio
	(dollars in thousands)
As of September 30, 2021
Tier 1 capital (to average assets)
Company	$	153,193	10.02	%	$	61,171	4.00	%	$	—	—
Bank	$	164,348	10.75	%	$	61,171	4.00	%	$	76,464	5.00	%
CET 1 capital (to risk-weighted assets)
Company	$	153,193	11.36	%	$	94,360	7.00	%	$	—	—
Bank	$	164,348	12.19	%	$	94,360	7.00	%	$	87,620	6.50	%
Tier 1 capital (to risk-weighted assets)
Company	$	153,193	11.36	%	$	114,580	8.50	%	$	—	—
Bank	$	164,348	12.19	%	$	114,580	8.50	%	$	107,840	8.00	%
Total capital (to risk-weighted assets)
Company	$	167,290	12.41	%	$	141,540	10.50	%	$	—	—
Bank	$	178,445	13.24	%	$	141,540	10.50	%	$	134,800	10.00	%

	Actual				Required for Capital Adequacy Purposes				Minimums To Be “Well Capitalized” Under Prompt Corrective Action
	Amount		Ratio		Amount		Ratio		Amount		Ratio
	(dollars in thousands)
As of December 31, 2020
Tier 1 capital (to average assets)
Company	$	118,837	9.24	%	$	51,426	4.00	%	$	—	—
Bank	$	130,852	10.18	%	$	51,426	4.00	%	$	77,139	5.00	%
CET 1 capital (to risk-weighted assets)
Company	$	118,837	10.63	%	$	78,257	7.00	%	$	—	—
Bank	$	130,852	11.70	%	$	78,257	7.00	%	$	72,667	6.50	%
Tier 1 capital (to risk-weighted assets)
Company	$	118,837	10.63	%	$	95,026	8.50	%	$	—	—
Bank	$	130,852	11.70	%	$	95,026	8.50	%	$	89,436	8.00	%
Total capital (to risk-weighted assets)
Company	$	135,196	12.09	%	$	117,835	10.50	%	$	—	—
Bank	$	142,711	12.77	%	$	117,835	10.50	%	$	117,795	10.00	%